Virgin Media O2 UK Broadband Users Grow to 5.73M as FTTP Adds 281K Premises

The latest Q3 2024 results from Virgin Media (O2) have been published, which shows that they’re home to 5,726,900 fixed broadband customers (up by 16.2k in Q3 vs -12.2k in Q2) and expanded their full fibre (FTTP) network to 281,100 premises – primarily via nexfibre (down from 295k in Q2). VMO2 has also sold a minority 8.3% stake in Cornerstone (worth £186m).

According to the latest results, the combined VMO2 and nexfibre fixed broadband network currently reaches 17,770,100 Homes Serviceable (up from 17,489,000 in Q2) and the vast majority of that new build is from nexfibre. The nexfibre network alone now accounts for over 1.5 million UK premises passed of this total.

NOTE: Virgin Media is the only major ISP on nexfibre’s network via an “exclusive partnership” (here). More ISPs will be added in the future (here) and Virgin’s own network will also open up to wholesale via NetCo in H1 2025 (here).

The results reveal that a total of around 5.3 million Virgin Media and nexfibre premises (footprint) are now covered by FTTP (XGS-PON and RFOG), which is up from 5m in Q2 2024. But a tiny portion of the nexfibre figures will include a bit of infill build for Virgin Media itself (e.g. existing new build homes sites).

The c.175,000 premises passed by Upp, which was acquired by nexfibre last year, have also yet to be fully integrated into VMO2’s totals, which is despite this update stating that Virgin has now completed the integration work (i.e. it sounds a bit contradictory when they talk about “successful completion of integration work“, yet for some reason the majority of the 175,000 acquired premises are “still to be transferred“).

Nexfibre Rollout Progress
Q3 2024 = 281,100 Premises
Q2 2024 = 295,300 Premises
Q1 2024 = 194,000 Premises
Q4 2023 = c.299,000 Premises
Q3 2023 = 250,800 Premises
Q2 2023 = 175,500 Premises
Q1 2023 = 107,800 Premises
Q4 2022 = 24,000 Premises

Just for context. Telefónica, Liberty Global and InfraVia Capital Partners setup a new £4.5bn joint venture called nexfibre in 2022 (here), which aims to deploy an open access full fibre (FTTP) network to reach “up to” 7 million UK homes (starting with 5m by 2026) in areas NOT served by Virgin Media’s own network of 16m+ premises. But Virgin Media, which shares some of the same parentage, is currently the only ISP on this network (here).

At the same time, Virgin Media’s Project Mustang programme is also upgrading their older Hybrid Fibre Coax (HFC) and FTTP based Radio Frequency over Glass (RFoG) network – covering over 16 million premises – to harness the same XGS-PON based FTTP technology as nexfibre. But this process isn’t due to complete until 2028, although it will eventually mean that VMO2 and nexfibre cover up to 23 million premises with full fibre.

The operator’s (O2) mobile base has also grown during Q1, while sadly Virgin Media has stopped giving any solid figures for their Pay TV (video) base (this often happens when a base is in decline).

VMO2 Q3 2024 UK Customer (Connection) Figures
5,726,900 Fixed Broadband – (up from 5,710,700 in Q2)
45,412,100 Mobile inc. Wholesale – (down from 45,486,400)

The total mobile base reduced by 74,300 connections in the quarter, include a small portion of contract users. But the main fall came from a reduction of 221,300 in IoT connections, which is attributable to the “expected loss of very low value connections following the introduction of a minimum charge pricing mechanism“. The latest results also state that outdoor 5G coverage is now available to 68% of the UK population (up from 65% in Q2).

On the financial front, VMO2 reported total revenue of £2,701.8m in Q3 2024, which is up from £2,673.7m last quarter.

Lutz Schüler, CEO of VMO2, said:

“During Q3 we have continued to make progress against our core strategy as we invest in the foundations for future growth.

We delivered on both volume and value in consumer fixed, with a return to customer growth coupled with an increase in fixed-line ARPU. In mobile, we saw a quarterly trend improvement in key metrics, supported by a reduction in O2 churn during a summer of key campaigns for our loyalty programme Priority and inclusive EU roaming.

Our 5G and fibre rollout continues at pace, and we have invested more than £1.5 billion so far this year as we focus on delivering a great customer experience with fast, reliable connectivity in more areas, increased loyalty benefits and improvements in our customer service performance.

In the first nine months we are tracking well against EBITDA guidance, enabling us to reiterate all guidance metrics with confidence, as we keep our foot on the gas with targeted investments in the salient final quarter.”

The latest results didn’t include any useful updates on Virgin Media’s plans for going wholesale via NetCo in 2025, but we might hear more about that in the near future. But VMO2 did finally confirm the sale of a minority 8.33% stake in mobile tower joint venture CTIL (Cornerstone), to funds managed by Equitix.

The above move follows on from, and is along equivalent terms to, a previous minority stake sale in CTIL by VMO2 in Q4 2023. The deal, which will see the company receive £186m in cash upon final completion, is structured through a 16.66% sale in a holding company which indirectly owns 50% of Cornerstone. Under the ownership structure, Virgin Media O2 will continue to proportionately consolidate Cornerstone as a joint operation.

Cornerstone is the UK’s largest mobile towers business, which owns and manages a nationwide network of around 20,000 sites used by O2 and Vodafone UK, providing critical services for approximately 60% of UK mobile subscribers. The money may help with investment in other areas, such as the £1.5bn+ that has already been spent this year on 5G and fibre roll-outs.

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